Satellite radio has never as popular as it is right now, but Sirius XM Holdings (NASDAQ:SIRI) investors aren't feeling the love. The stock is trading lower in 2019 after generating positive returns in each of the 10 previous years.

Growth is slowing, and it's fair for investors to question if satellite radio will be as ubiquitous in the future as it is today. Sirius XM has lived and died by its premium radio service that is consumed primarily by drivers. What happens if music consumption and travel trends change? Sirius XM is trading 21% below the 13-year highs it hit last summer, but where will it be come 2024? Let's see what the playing field may look like in five years. 

Charlize Theron at a Sirius XM Town Hall interview

Image source: Sirius XM Holdings.

Turning the dial in 2024

It's easy to question the long-term viability of satellite radio and, with that, Sirius XM's prospects as a long-term investment. The mobile revolution is only getting stronger, giving everyone access to a growing array of streaming music apps. The number of connected cars on the market also continues to expand. 

The allure of free or nearly free audio streaming through Bluetooth-enabled dashboards is clear, but it hasn't been a deal breaker for Sirius XM before. Its audience keeps widening despite years of mobile migration. Sirius XM has found a way to grow its reach through the first 11 years since the App Store was launched. Again, Sirius XM stock has delivered positive dividend-adjusted returns in each of the 10 full years of App Store availability. It could be a coincidence, but will the next five years really be any different? 

The trends moving young consumers away from auto ownership could be more problematic for Sirius XM in 2024. Auto sales are declining. Industry trackers Edmunds and AlixPartners are forecasting 16.9 million in new car sales this year, down from 17.3 million in 2018. AlixPartners sees the vehicle sales continuing to lose their shine, falling to 16.3 million next year and only 15.1 million come 2021. 

New car sales have historically been the lifeblood for Sirius XM subscriptions, and it's natural to be concerned if this is the beginning of a secular decline in auto ownership. Ride-sharing and urbanization revolutions find fewer young people interested in the mounting expenses of owning a car, and that's before we even consider where the autonomous driving movement will be in five years. If vehicles will require less human involvement, will radio still be as popular when there will be so many other options available?

Thankfully for Sirius XM investors, the satellite radio giant has already started to tackle the potential transitory nature of its flagship tech with the Pandora acquisition it closed on earlier this year. Sirius XM now has huge audiences streaming and tuning in through satellite radio, and just last month, it began to broaden the streaming options for its in-car subscribers. 

I won't take a stab at guessing when we'll hit peak Sirius XM, the top for satellite radio subscriptions. The likely course here is that Sirius XM will continue to evolve in premium music, reaching consumers who are willing to pay up for superior audio content wherever they may be. It will continue to be in the car for most of them, but Sirius XM will find new ways to monetize its proprietary content. The market has cooled on Sirius XM over the past year, but it should continue to be a tastemaker in premium radio and a market beater over the next five years. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.